captioning sponsored by cbs >> i don't think government can solve all our problems but government's not the source of our problems, either. >> i have a plan. i have five steps that will get this economy going. >> i'm not fighting to create democratic jobs or republican jobs, i'm trying to create american jobs. >> i will not raise taxes on middle-income americans. >> the debates will matter to some undecided voters. >> the debates could decide the election for either one of us. >> from denver, colorado, here is scott pelley. >> pelley: good evening. we're about to see the one thing we haven't seen in this long campaign for the presidency-- the candidates side by side. it's the first of three debates between the democratic incumbent-- 51-year-old barack obama-- and his republican challenger 65-year-old mitt romney. it comes 34 days before the

election-- though early voting is already under way in many states. the focus tonight is domestic issues, including the economy, still struggling to recover from the great recession. polls show the race is very close nationally, but in swing states that will tip the balance, the president is ahead. so he'll be trying to protect his lead and for mitt romney, it's an opportunity for a breakout moment. in front of what could be the biggest audience he will have before election day. the sole questioner tonight is jim lehrer. it's the 12th time he's served as moderator. >> lehrer: good evening. from the magnus arena at the university of denver in denver, colorado. i'm jim lehrer of the pbs newshour and i welcome you to the first of the 2012 presidential debates between president barack obama the democratic nominee and former massachusetts governor romney, the republican nominee.

this debate and the next three-- two presidential, one vice presidential-- are sponsored by the commission on presidential debates. tonight's 90 minutes will be about domestic issues and will follow a format designed by the commission. there will be six roughly 15-minute segments with two-minute answers for the first question. then open discussion for the remainder of each segment. thousands of people offered suggestions on segment subjects or questions via the internet and other means but i made the final selections and, for the record, they were not submitted for approval to the commission or the candidates. the segments, as i announced in advance, will be three on the economy and one each on health care, the roll of government, and governing. with an emphasis throughout on differences, specifics and

choices. both candidates will also have two minute closing statements. the audience here in the hall has promised to remain silent. no cheers, aphraus, boos, hisses among other noisy distracting things so we may all concentrate on what the candidates have to say. there is a noise exception right now, though, as we welcome president obama and governor romney. (applause) >> lehrer: gentlemen welcome to you both.

let's start with the economy segment one and let's begin with jobs. what are the major differences between the two of you about how you would go about creating new jobs? you have two minutes each of you have two minutes to start. a coin toss has determined mr. president you go first. >> well, thank you very much, jim, for this opportunity. i want to thank governor romney and the university of denver for your hospitality. there are a lot of points i want to make tonight but the most important one is that 20 years ago i became the luckiest man on earth because michelle obama agreed to marry me. and so i just want to wish sweetie, you happy anniversary and let you know that a year from now we will not be celebrating it in front of 40 million people. (laughter) four years ago we went through the worst financial crisis since the great depression. millions of jobs were lost, the auto industry was on the brink

of collapse, the financial system had frozen up. and because of the resilience and the determination of the american people we've begun to fight our way back. over the last 30 months we've seen five million jobs in the private sector created. the auto industry has come roaring back. and housing has begun to rise. but we all know that we've still got a lot of work to do. and so the question here tonight is not where we've been but where we're going. governor romney has a perspective that says if we cut taxes-- skewed towards the wealthy-- and roll back regulations that we'll be better off. i've got a different view. i think we've got to invest in education and training. i think it's important for us to develop new sources of energy here in america. that we change our tax code to make sure we're helping small businesses and companies that are investing here in the united states. that we take some of the money that we're saving as we wind

down two wars to rebuild america. and that we reduce our deficit in a balanced way that allows us to make these critical investments. now, it ultimately is going to be up to the voters, to you which path we should take. are we going to double down on the top-down economic policies that helped to get us into this mess or do we embrace a new economic patriotism that says america does best when the middle-class does best? and i'm looking forward to having that debate. >> lehrer: governor romney two minutes. >> thank you jim it's an honor to be here with you and i appreciate the chance to be with the president. i'm pleased to be at the university of denver, appreciate their welcome and also the presidential commission on these debates. and congratulations to you mr. president, on your anniversary. i'm sure this was the most romantic place you could imagine here with me. (laughter) congratulations. this is obviously a very tender topic. i've had the occasion over the last couple of years of meeting people across the country. i was in dayton, ohio, and a

woman grabbed my arm and she said "i've been out of work since may, can you help me?" ann yesterday was at a rally in denver and a woman came up to her with a baby in her arms and said "ann, my husband has had four jobs in three years part-time jobs. he's lost his most recent job and we've now just lost our home. can you help us?" and the answer is yes, we can help. but it's going to take a different path. not the one we've been on. not the one the president describes as a top-down cut taxes for the rich. that's not what i'm going to do. my plan has five basic parts: one, get us energy independent. north american energy independent. that creates about four million jobs. number two open up more trade particularly in latin america, crack down on china if and when they cheat. number three make sure our people have the skills they need to succeed. and the best schools in the world. we're far away from that now. number four, get us to a balanced budget. number five, champion small business.

it's small business that creates the jobs in america and over the last four years small business people have decided that america may not be the place to open a new business because new business startups are down to a 30-year low. i know what it takes to get small business growing again to hire people. now, i'm concerned that the path that we're on has just been unsuccessful. the president has a view very similar to the view he had when he ran four years ago that a bigger government, spending more taxing more, regulating more, if you will, trickle-down government, would work. that's not the right answer for america. i'll restore the vitality that gets america working again. thank you. >> lehrer: mr. president please respond directly to what the governor just said about trickle down. the trickle-down approach as he said yours is. >> well, let me talk specifically about what i think we need to do. first, we've got to improve our education system. and we've made enormous progress

drawing on ideas both from democrats and republicans that are already starting to show gains in some of the toughest to deal with schools. we've got a program called "race to the top" that has prompted reforms in 46 states around the country, raising standards improving how we train teachers. so now i want to hire another 100,000 new math and science teachers. and create two million more slots in our community colleges so that people can get trained for the jobs that are out there right now. and i want to make sure that we keep tuition low for our young people. when it comes to our tax code, governor romney and i both agree that our corporate tax rate is too high. so i want to lower it. particularly for manufacturing. taking it down to 25%. but i also want to close those loopholes that are giving incentives for companies that are shipping jobs overseas. i want to provide tax breaks for companies that are investing here in the united states. on energy governor romney and i we both agree that we've got to

boost american energy production. and oil and natural gas production are higher than they've been in years. but i also believe that we've got to look at the energy source of the future like wind and solar and biofuels and make those investments. so all of this is possible. now, in order for us to do it we have to close our deficit and one of the things i'm sure we'll be discussing tonight is how do we deal with our tax code and how do we make sure that we are reducing spending in a responsible way? but also how do we have enough revenue to make those investments? and there is where there's a difference because governor romney's central economic plan calls for a $5 trillion tax cut on top of the extension of the bush tax cuts, that's another trillion and $2 trillion in additional military spending that the military hasn't asked for. that's $8 trillion. how we pay for that, reduce the deficit and make the investments that we need to make without dumping those costs on to middle-class americans i think is one of the central questions

of this campaign. >> lehrer: both of you have spoken about a lot of different things and we're going to try to get through them in as specific a way as we possibly can. but first, governor romney, do you have a question you'd like to ask the president directly about something he just said? >> well, sure i'd like to clear up the record and go through it piece by piece. first of all, i don't have a $5 trillion tax cut. i don't have a tax cut of the scale that you're talking about. my view is we ought to provide tax relief to people in the middle-class. but i'm not going to reduce the share of taxes paid by high-income people. high-income people are doing just fine in this economy. they'll do fine whether you're president or i am. the people who are having the hard time right now are middle-income americans. under the president's policies, middle-income americans have been buried. they're just being crushed. middle-income americans have seen their income come down by $4,300. this is a tax in and of itself. i'll call it the economy tax. it's been crushing. the same time gasoline prices have doubled under the

president, electric rates are up, food prices are up. health care costs have gone up by $2,500 a family. middle-income families are being crushed. so the question is how to get them going again. i've described it. it's energy, trade the right kind of training programs, balancing our budget and helping small business. those are the cornerstones of my plan. but the president mentioned a couple of other ideas i'll just note. first education. i agree education is key. particularly the future of our economy. but our training programs right now, we've got 47 of them housed in the federal government reporting to eight different agencies overhead is overwhelming. we've got to get those dollars back to the states and go to the workers so they can create their own pathways to getting the training they need for jobs that will really help them. the secondary ya, taxation. we agree we ought to bring the tax rates down and i do both for corporations and individuals. but in order for us not to lose revenue and have the government run out of money i also lower deductions and credits and exemptions so we keep taking in

the same money when you also account for growth. the third area, energy. energy is critical and the president pointed out correctly that production of oil and gas in the u.s. is up. but not due to his policies. in spite of his policies. mr. president, all of the increase in natural gas and oil has happened on private land not on government land. on government land your administration has cut the number of permits and licenses in half. if i'm president i'll double them. and also get the oil from offshore and alaska and bring that pipeline in from canada and, by the way i like coal. i'm going to make sure we can continue to burn clean coal. people in the coal industry feel like it's getting crushed by your policies. i want to get america and north america energy independent so we can create those jobs. and finally with regards to that tax cut. look, i'm not looking to cut massive taxes and to reduce the revenues going to the government. my number-one principle is there will be no tax cut that ads adds

to the deficit. i want to underline that, no tax cut that adds to the deficit but i want to reduce the burden being paid by middle-income americans. to do that, that means i cannot reduce the burden paid by high-income americans. so any language to the contrary is not accurate. >> lehrer: mr. president? >> well, let's talk about taxes because i think it's instructive. four years ago when i stood on this stage i said that i would cut taxes for middle-class families. and that's exactly what i did. we cut taxes for middle-class families by about $3,600. and the reason is because i believe that we do best when the middle class is doing well. and by giving them those tax cuts, they had a little more money in their pocket. so maybe they can buy a new car. they are certainly in a better position to weather the extraordinary recession that we went through.

they can buy a computer for their kid who's going off to college. which means they're spending more money businesses have more customers, businesses make more profits and then hire more workers. now, governor romney's proposal-- that he has been promoting for 18 months-- calls for a $5 trillion tax cut on top of $2 trillion of additional spending for our military. and he is saying that he is going to pay for it by closing loopholes and deductions. the problem is that he's been asked over a hundred times how you would close those deductions and loopholes and he hasn't been able to identify them. but i'm going to make an important point here, jim. when you add up all the loopholes and deductions that upper income individuals can -- are currently taking advantage of, you take those all away, you don't come close to paying for $5 trillion in tax cuts and $2 trillion in additional military spending. and that's why independent studies looking at this said the only way to meet governor romney's pledge of not reducing

the deficit -- or not adding to the deficit is by burdening middle-class families-- the average middle-class family with children would pay about $2,000 more. now, that's not my analysis, that's the analysis of economists who have looked at this. and that kind of top-down economics where folks at the top are doing well so the average person making $3 million is getting a $250,000 tax break while middle-class families are burdened further that's not what i believe is a recipe for economic growth. >> lehrer: all right. what is the difference? let's stay on taxes for -- >> right. >> lehrer: let's stay on taxes for a moment here. >> virtually everything he said about my tax plan is inaccurate. if the tax plan he described were a tax plan i was asked to support i'd say absolutely not. i'm not looking for a $5 trillion tax cut. what i've said is i won't put in place a tax cut that adds to the deficit. that's part one. so there's no economist can say

"mitt romney's tax plan adds $5 trillion" if i say "i will not add to the deficit with my tax plan." number two i will not reduce the share paid by high-income individuals. i know that you and your running mate keep saying that and i know it's a popular thing to say with a lot of people but it's just not the case. look i've got five boys. i'm used to people saying something that's not always true but just keep on repeating it and ultimately hoping i'll believe it. but that is not the case. i will not reduce the taxes paid by high-income americans. and number three i will not under any circumstances raise taxes on middle-income families. i will lower taxes on middle-income families. now, you cite a study. there's six other studies that look at the study you describe and say it's completely wrong. i saw a study that came out today that said you're going to raise taxes by $3,000 to $4,000 on middle income families. there's always these studies out there. let's get to the bottom line. that is i want to bring down rates. i want to bring rates down and lower deductions and exemptions

and credits and so forth so that we keep getting the revenue we need. then you think why lower the rates? and the reason is because small business pays that individual rate. 54% of america's workers work in businesses that are taxed not at the corporate tax rate but at the individual tax rate. and if we lower that rate they will be able to hire more people. for me, this is about jobs. this is about getting jobs for the american people. >> lehrer: that's where we started. do you challenge what the governor just said about his own plan? >> well, for 18 months he's been running on this tax plan. and now five weeks before the election he's saying that his big bold idea is never mind. and the fact is that if you are lowering the rates the way you describe governor then it is not possible to come up with enough deductions and loopholes that only affect high-income individuals to avoid either raising the deficit or burdening

the middle-class. it's math. it's arithmetic. now, governor romney and i do share a deep interest in encouraging small business growth. so at the same time that my tax plan has already lowered taxes for 98% of families, i also lowered taxes for small businesses 18 times. and what i want to do is continue the tax rates the tax cuts that we put into place for small businesses and families. but i have said that for incomes over $250,000 a year that we should go back to the rates that we had when bill clinton was president when we created 23 million new jobs, went from deficit to surplus and created a whole lot of millionaire to boot. and the reason this is important is because by doing that we can not only reduce the deficit, we can not only encourage job growth through small businesses but we're also able to make the investments that are necessary

in education. or in energy. and we do have a difference, though, when it comes to definitions of small business. now, under my plan, 97% of small businesses would not see their income taxes go up. governor romney says well those top 3%, they're the job creators, they'd be burdened. but under governor romney's definition, there are a whole bunch of millionaires and billionaires who are small businesses. donald trump is a small business. i know donald trump doesn't like to think of himself as small anything but that's how you define small business if you're getting business income. and that kind of approach i believe will not grow our economy because the only way to pay for it without either burdening the middle-class or blowing up our deficit is to make drastic cuts in things like education, making sure that we are continuing to invest in basic science and research, all

the things that are helping america grow. and i think that would be a mistake. >> lehrer: all right. >> jim let me come back on the that point -- >> lehrer: just for the record. just so everybody understands we're way over our first 15 minutes. >> it's fun isn't it? (laughter) >> that's okay. >> lehrer: no problem. as long as you don't have a problem i don't have a problem because we're still on the economy. we're going to come back to taxes and move on to the deficit and a lot of other things, too. okay, go ahead sir. >> you bet. mr. president, you're absolutely right with regards to 97% of the businesses are not taxed at the 35% tax rate they're taxed at a lower rate. but those businesses that are in the last 3% of businesses happen to employ half-- half-- of all the people who work in small business. those are the businesses that employ one quarter of all the workers in america. and your plan is to take their tax rate from 35% to 40%. now, i talked to a guy who has a very small business. he's in the electronics business in st. louis. he has four employees.

he said he and his son calculated how much they pay in taxes. federal income tax federal payroll tax state income tax state sales tax state property tax, gasoline tax. it added up to well over 50% of what they earned. and your plan is to take the tax rate on successful sphauz small businesses from 35% to 40%. the national federation of independent businesses says that will cost 700,000 jobs. i don't want to cost jobs! my priority is jobs. and so what i do is i bring down the tax rates lower deductions and exemptions. the same idea behind bowles simpson, by the way. get the rates down, lower deductions and exemptions to create more jobs because there's nothing better for getting us to a balanced budget than having more people working earning more money paying more taxes. that's by far the most effective and efficient way to get this budget balanced. >> jim you may want to move on to another topic but i would

just say this to the american people. if you believe we can cut taxes by $5 trillion and add $2 trillion in additional spending that the military is not asking for, $7 trillion just to give you a sense over ten years, that's more than our entire defense budget and you think that by closing loopholes and deductions for the well-to-do somehow you will not end up picking up the tab then governor romney's plan may work for you. but i think math, common sense and our history shows us that's not a recipe for job growth. look, we've tried this. we've tried both approaches. the approach that governor romney's talking about is the same sales pitch that was made in 2001 and 2003. and we ended up with the slowest job growth in 50 years. we ended up moving from surplus to deficits.

and it all culminated in the worst financial crisis since the great depression. bill clinton tried the approach that i'm talking about. we created 23 million new jobs. we went from deficit to surplus and businesses did very well. so in some ways we've got some data on which approach is more likely to create jobs and opportunity for americans and i believe that the economy works best when middle-class families are getting tax breaks so they've got some money in their pockets and those of us who have done extraordinarily well because of this magnificent country that we live in that we can afford to do a little bit more to make sure we're not blowing up the deficit. >> lehrer: next segment -- >> the president began this segment so i think i'm going to get the last word so i'm going to take it. >> lehrer: you're going to get the first word in that segment. >> he's going to get the first word in that segment. i'm going to get the last word. >> he can rev it. >> let me repeat what i just said. i'm not in favor of a $5

trillion tax cut. that's not my plan. my plan is not to put in place any tax cut that will add to the deficit. so you may keep referring to it as a $5 trillion tax cut but that's not my plan. >> okay. >> number two let's look at history. my plan is not like anything that's been tried before. my plan is to bring down rates but also bring down deductions and exemptions and credits at the same time so the revenue stays in but that we bring down rates to get more people working. my priority is putting people back to work in america. they're suffering in this country. and we talk about evidence. look at the evidence of the last four years! it's absolutely extraordinary. we've got 23 million people out of work or stopped looking for work in this country. >> lehrer: all right. >> we've got -- when the year before. going forward with the status quo is not going to cut it for the american people who are struggling today.

>> lehrer: all right. let's talk -- we're still on the economy. this is theoretically now a second segment still on the economy and specifically on what to do about the federal deficit. the federal debt. and the question -- you each have two minutes on this and governor romney you go first because the president went first on segment one. and the question is this: what are the differences between the two of you as to how you would go about tackling the deficit problem in this country? >> well, good, i'm glad you raised that. it's a critical issue. i think it's not just an economic issue, i think it's a moral issue. i think it's, frankly not moral for my generation to keep spending massively more than we take in knowing those burdens are going to be passed on to the next generation. and they're going to be paying the interest and the principle all their lives and the amount of debt we're adding at a trillion a year is simply not moral. so how do we deal with it? well mathematically there are three ways that you can cut a

deficit. one, of course is to raise taxes. number two is to cut spending. and number three is to grow the economy. because if more people work in a growing economy, they're paying taxes and you can get the job done that way. the president would prefer raising taxes. i understand. the problem with raising taxes is that it slows down the rate of growth. and you could never quite get the job done. i want to lower spending and encourage economic growth at the same time. what things would i cut from spending? well, first of all i will eliminate all programs by this test if they don't pass it. is the program so critical it's worth borrowing money from china to pay for it? if not i'll get rid of it. obamacare is on my list-- i apologize mr. president. i use that term with all respect. >> i like it. >> okay, good. i'll get rid of that. sorry, jim i'm going to stop the subsidy to pbs. i'm going to stop other things. i like pbs. i love big bird. i actually like you too. but i'm not going to keep on spending money on things to borrow money from china to pay for it. that's number one. number two i'll take programs

that are currently good programs but i think can be run more efficiently at the state level and send them to the state. number three i'll make government more efficient and cut back the number of employees, combine some agencies and departments. my cutbacks will be done through attrition, by the way. this is the approach we have to take to get america to a balanced budget. the president said he'd cut the deficit in half. unfortunately, he doubled it. trillion-dollar deficits for the last four years. the president's put in place as much public debt -- almost as much debt held by the public as all prior presidents combined. >> lehrer: mr. president two minutes. >> when i walked into the oval office i had more than a trillion dollar deficit greeting me. and we know where it came from. two wars that were paid for on a credit card. two tax cuts that were not paid for. and a whole bunch of programs that were not paid for. and then a massive economic crisis.

and despite that, what we've said is we had to take emergency measures to make sure we didn't slip into a great depression but what we've also said is let's make sure we are cutting out those things not helping us grow. so 77 government programs. everything from aircrafts that the air force had ordered but weren't working very well. 18 government programs for education that were well intentioned but weren't helping kids learn. we went after medical fraud in medicare and medicaid very aggressively. more aggressively than ever before and have saved tens of billions of dollars. 50 billion dollars of waste taken out of the system. and i worked with democrats and republicans to cut a trillion dollars out of our discretionary domestic budget. that's the largest cut in the discretionary domestic budget since dwight eisenhower. now, we all know that we've got to do more. and so i've put forward a specific four trillion dollar deficit reduction plan.

it's on the web site, you can look at all the numbers-- what cuts we make and what revenue we raise. and the way we do it is $2.50 for every cut we ask for $a dollar of additional revenue paid for-- as i indicated earlier-- by asking those of us who have done very well in this country to contribute a little bit more to reduce the deficit. governor romney earlier mentioned the bowles-simpson commission. well, that's how the commission, bipartisan commission that talked about how we should move forward suggested we have to do it. in a balanced way with some revenue and some spending cuts. and this is a major difference that governor romney and i have. let me just finish this point because you're looking for contrast. when governor romney stood on a stage with other republican candidates for the nomination and he was asked "would you take $10 of spending cuts for just one dollar of revenue?" and he said no.

now, if you take such an unbalanced approach than that means you are going to be gutting our investments in schools and education. it means that governor romney is talked about medicaid and how we could send it back to the states but effectively this means a 30% cut in the primary program we help for seniors who are in nursing homes, for kids who are with disabilities. >> lehrer: mr. president i'm sorry -- >> that's not a right strategy for us to move forward. >> lehrer: way over the two minutes. >> sorry. >> lehrer: governor, what about simpson bowles? will you support simpson-bowles? >> simpson-bowles, the president should have grabbed that. >> pelley:>> lehrer: do you support it? >> i have my own plan. in my view the president should have grabbed it. if you wanted to make adjustments to it take it, go to congress, fight for it. >> that's what we've done. made adjustments and we're putting it before congress right now. $4 trillion plan. >> you've been president four years. you said you'd cut the deficit in half, it's four years later we have trillion dollar deficits.

the c.b.o. says we'll have a trillion dollar deficit the next four years. if you're reelected we'll get to a trillion dollar debt. you said before you would cut the deficit in half. and i love this idea of $4 trillion in cuts. you found four trillion dollars to get closer to a balanced budget except we still show trillion dollar deficits every year. that doesn't get the job done. let me come back and say why is it that i don't want to raise taxes? why don't i want to raise taxes on people? and actually you said it. back in 2010 you said i'm going to extend the tax policies that we have now. i'm not going to raise taxes on anyone because when the economy is growing slow like this, when we're in recession, you shouldn't raise taxes on anyone. well, the economy is still growing slow. as a matter of fact, it's growing much more slowly now than when you made that statement. and so if you believe the same thing, you just don't want to raise taxes on people. and the reality is it's not just wealthy people you mentioned donald trump it's not just donald trump you're taxing. it's all those businesses that employ one quarter of the workers in america these small

businesses that are taxed as individuals. you raise taxes and you kill jobs. that's why the national federation of independent businesses said your plan will kill 700,000 jobs. i don't want to kill jobs in this environment. let me make one more point. >> lehrer: let me -- let him answer the taxes thing for a moment. mr. president? >> well, we've had this discussion before. >> lehrer: about the idea that in order to reduce the deficit there has to be revenue in addition to cuts. >> there has to be revenue in addition to cuts. governor romney has ruled out revenue. he's ruled out revenue. >> lehrer: that's true. >> absolutely. >> lehrer: completely? >> the revenue i get is by more people working getting higher pay paying more taxes. that's how we get growth and balance the budget. but the idea of taxing people more, putting more people out of work, you'll never get there. you never balance the budget by raising taxes. spain. spain spends 42% of their total economy on government. >> lehrer: okay. >> we're now spending 42% of our

economy on government. i don't want to go down the path to spain. i want to go down the path of growth that puts americans to work with more money coming in because they're working. >> lehrer: mr. president you're saying in order to get the job done it's got to be balanced? >> if we're serious we've got to take a balanced responsible approach. and by the way this is not just when it comes to individual taxes. let's talk about corporate taxes. now i've identified areas where we can right away make a change that i believe would actually help the economy. the oil industry gets $4 billion a year in corporate welfare. basically they get deductions that those small businesses that governor romney refers to, they don't get. now, does anybody think that exxonmobil needs some extra money when they're making money every time you go to the pump? why wouldn't we want to eliminate that? why wouldn't we eliminate tax

breaks for corporate jets? my attitude is if you have a corporate jet, you can probably afford to pay full freight, not get a special break for it. when it comes to corporate taxes, governor romney has said he wants to -- in a revenue-neutral way close loopholes, deductions, he hasn't identified which ones they are but that thereby bring down the corporate rate. well, i want to do the same thing but i've actually identified how we can do that. and part of the way to do it is to not give tax breaks to companies that are shipping jobs overseas. right now you can actually take a deduction for moving a plant overseas. i think most americans would say that doesn't make sense. and all that raises revenue. so if we take a balanced approach, what that then allows us to do is also to help young people-- the way we already have during my administration-- make sure that they can afford to go to college. it means that the teacher that i met in las vegas wonderful

young lady who describes to me -- she's got 42 kids in her class. the first two weeks she's got them -- some of them sitting on the floor until finally they get reassigned. they're using textbooks that are ten years old. that is not a recipe for growth. that's not how america was built. and so budgets reflect choices. ultimately we're going to have to make some decisions. and if we're asking for no revenue than that means that we've got to get rid of a whole bunch of stuff and the magnitude of the tax cuts that you're talking about governor, would end up resulting in severe hardship for people but more importantly, would not help us grow. as i indicated before, when you talk about shifting medicaid to states we're talking about potentially a 30% cut in medicaid over time. now that may not seem like a big deal when it just is numbers on a sheet of paper but if we're

talking about a family who's gotten a autistic kid and is depending on that medicaid, that's a big problem. and governors are creative. there's no doubt about it. but they're not creative enough to make up for 30% of rev on something like medicaid. what ends up happening is some people end up not getting help. >> jim let's -- we've gone on a lot of topics there so it's going to take a minute to go from medicaid to schools to oils to tax breaks and companies going overseas so let's go through them one by one. first of all the department of energy has said the tax break for oil companies is $2.8 billion a year. and it's actually an accounting treatment that's been in place for 100 years. >> time to end it. >> and in one year you provided by $90 billion in breaks to the green energy world. now i like green energy as well, but that's about 50 year's worth of what oil and gas receives. and you say exxon and mobile -- actually this $2.8 million goes largely to smalling companies to

drilling operators. but if we get that tax rate from 35% to 25% that $2.8 billion is on the table. of course it's on the table. that's probably not going to survive you get that rate down to 25%. but don't forget, you put $90 billion, like 50 year's worth of breaks into solar and wind to solyndra and tesla. i mean, i had a friend who said you don't just pick the winners and losers, you pick the losers, all right? so this is not -- this is not the kind of policy you want to have. you want to get america energy secure. the second top chick as you said you get a deduction for taking a plant overseas? look, i've been in business for 25 years. i have no idea what you're talking about. i maybe need to get a new accountant. but the idea that you get a break for shipping jobs overseas is simply not the case. what we do have is where i'd like to bring money from overseas back to this country. and finally medicaid to states, i'm not sure where that came in except this. i would like to take the

medicaid dollars that go to states and say to a state "you're going to get what you got last year plus inflation plus 1% and then you're going to manage your care for your poor in the way you think best." and i remember as a governor when this idea was floated by tommy thompson the governors-- republican and democrats-- said "please let us do that. we can care for our own poor in so much better and more effective a way than having the federal government tell us how to care for our poor." so one of the magnificent things about this country is the whole idea that states are the laboratories of democracy. don't have the federal government tell everybody what kind of training programs they have to have and what kind of medicaid they have to have. let states do this. and, by the way if a state gets in trouble we can step in and see if we can find a way to help them. >> lehrer: let's go. >> but the right approach is one which relies on the brilliance of our people and states, not the. from. >> lehrer: a few seconds then we're going on. still on the economy but another part of it. all right? all right.

this is segment three the economy. entitlements. first answer goes to you two minutes, mr. president. do you see a major difference between the two of you on social security? >> i suspect that on social security we've got a somewhat similar position. social security is structurally sound. it's going to have to be tweaked the way it was by ronald reagan and speaker -- democratic speaker tip tip o'neill. but the basic structure is sound. but i want to talk about the values behind social security and medicare. and then talk about medicare, because that's the big driver of our deficits right now. my grandmother some of you know, helped to raise me. my grandparents did. my grandfather died a while back. my grandmother died three days before i was elected president. and she was fiercely independent. she worked her way up, only had a high school education started as a secretary ended up being

the vice president of a local bank. and she ended up living alone by choice. and the reason she could be independent was because of social security and medicare. she had worked all her life, put in this money and understood that there was a basic guarantee, a floor under which she could not go. and that's the perspective i bring when i think about what's called entitlements. you know the name itself implies some sense of dependency on the part of these folks. these are folks who have worked hard. like my grandmother. and there are millions of people out there who are counting on this. so my approach is to say hour do we strengthen the system over the long term? and in medicare what we did was we said we are going to have the bring down the costs if we're going to deal with our long-term deficits, but to do that, let's look where some of the money is going. $716 billion we were able to save from the medicare program by no longer overpaying insurance companies.

by making sure that we weren't overpaying providers. and using that money we were actually able to lower prescription drug costs for seniors by an average of $600 and we were also able to make a significant dent in providing them the kind of preventative care that will ultimately save money throughout the system. so the way for us to deal with medicare in particular is to lower health care costs. when it comes to social security, as i said, you don't need a major structural change in order to make sure that social security is there for the future. >> lehrer: we'll follow up on this. first, governor romney, you have two minutes on social security and entitlements. >> well, jim our seniors depend on these programs and i know any time we talk about entitlements people become concerned that something's going to happen that's going to change their life for the worse. and the answer is neither the president nor i are proposing any changes for any current retirees or near retirees either to social security or medicare.

so if you're 60 or around 60 or older you don't need to listen any further. but for younger people we need to talk about what changes are going to be occurring. oh i just thought about one and that is, in fact, i was wrong when i said the president isn't proposing changes for current retirees, in fact, he is on medicare. on social security he's not. but on medicare for current retirees he's cutting $716 billion from the program. now, he says by not overpaying hospitals and providers. actually, just going to them and saying "we're going to reduce the rates you get paid across the board everybody's going to get a lower rate" that's not just going after places where there's abuse, that's saying "we're cutting the rates." some 15% of hospitals and nursing homes say they won't take any more medicare patients under that scenario. we also have 50% of doctors who say they won't take more medicare patients. this -- we have four million people on medicare advantage that will lose medicare advantage because of those $716 billion in cuts. i can't understand how you can

cut medicare $716 billion for current recipients of medicare. now, you point out well, we're putting back. we're going to give a better prescription program. that's one dollar for every 15 you've cut. they're smart enough to know that's not a good trade. i want to take that $716 billion you've cut and put it back into medicare. by the way, we can include a prescription program if we need to improve it. but the idea of cutting $716 billion from medicare to balance the additional cost of obamacare is, in minute, a mistake. and with regards to young people coming along i've got proposals to make sure medicare and social security are there for them without any question. >> lehrer: mr. president? >> first of all, i think it's important for governor romney to present this plan that he says will only affect folks in the future. and the essence of the plan is that he would turn medicare into a voucher program. it's called premium support but it's understood to be a voucher

program. >> lehrer: and you don't support that? >> i don't. and let me explain why. >> again that's for future people, not for current retirees. >> so if you're 54 or 55, you might want to listen. because this will affect you. the idea-- which was originally presented by congressman ryan, your running mate-- is that we would give a voucher to seniors and they could go out in the private marketplace and buy their own health insurance. the problem is that because the voucher wouldn't necessarily keep up with health care inflation it was estimated that this would cost the average senior about $6,000 a year. now, in fairness, what governor romney has now said is he'll maintain traditional medicare alongside it. but there's still a problem because what happens is those insurance companies are pretty clever at figuring out who are the younger and healthier seniors, they recruit them

leaving the older sicker seniors in medicare and every health care economist that looks at it says over time what will happen is the traditional medicare system will collapse. and then what you've got is folks like my grandmother at the mercy of the private insurance system precisely at the time when they are most in need of decent health care. so i don't think vouchers are the right way to go. and this is not my -- only my opinion. a.a.r.p. thinks that the savings that we obtaind from medicare bolstered the system, lengthen it had medicare trust fund by eight years benefits were not affected at all and ironically, if you repeal obamacare-- and i have become fond of this term, obamacare-- if you repeal it, what happens is those seniors right away from r going to be paying $600 more in prescription care. they're now going to have to be paying copays for basic checkups that can keep them healthier and

the primary beneficiary of that repeal are insurance companies that are estimated to gain billions of dollars back when they aren't making seniors any healthier. and i don't think that's the right approach when it comes to making sure that medicare is stronger over the long term. >> lehrer: we'll talk about -- specifically about health care in a moment. but do you support the voucher system governor? >> what i support is no change for current retirees and near retirees to medicare and the president supports taking $716 billion out of that program. >> lehrer: what about the voucher system? >> that's number one. >> lehrer: all right. >> number two is for people coming along that are young. what i'd do to make sure that we can keep medicare in place for them is to allow them to either choose the current medicare program or a private plan. their choice. they get to choose -- and they'll have at least two plans that will be entirely at no cost to them. so they don't have to pay additional money no additional

$6,000 that's not going to happen, they'll have at least two plans. and by the way if the government can be as efficient as the private sector and offer premiums as low as the private sector people will be happy to get traditional medicare or they'll be able to get a private plan. i know my own view is i'd rather have a private plan. i'd just as soon not having v the government telling me what kind of health care i get. i'd like to have an insurance company. if i don't like them, i can get rid of them and find a different insurance company. people make their own choice. the other thing to do to save medicare, we have to have the benefits high for those that are low income but for higher income people we have to lower the benefits. we have to make sure this program is there for the long term. that's the plan that i put forward. and, by the way, the idea came not even from paul ryan or senator wide on who is the coauthor of the bill with paul ryan in the senate but it came from bill clinton's chief of staff. this is an idea that's been around a long time which is saying hey let's see if we can't get competition into the medicare world so that people can get the choice of different plans at lower cost, better

quality. i believe in competition. >> jim if i can just respond very quickly. first of all every study has shown that medicare has lower administrative cost than private insurance does, which is why seniors are generally pretty happy with it. and private insurers have to make a profit. nothing wrong with that. that's what they do. and so you've got higher administrative costs plus profit on top of that and if you are going to save any money through what governor romney's proposing, what has to happen is that the money has to come from somewhere. and when you move to a voucher system, you are putting seniors at the mercy of those insurance companies and over time if traditional medicare has decayed or fallen apart then they're stuck. and this is the reason why a.a.r.p. has said that your plan would weaken medicare substantially and that's why

they were supportive of the approach that we took. one last point i want to make. we do have to lower the costs of health care. not just in medicare -- >> lehrer: we'll talk about that in a minute. >> but overall. >> that's a big topic. can we stay on medicare. >> lehrer: is i want to get to that topic. but before we leave the economy -- >> let's get back to medicare. >> lehrer: no, no -- >> the president said the government can provide the service at lower cost and without a profit. if that's the case then it will always be the best product people can purchase. >> lehrer: wait a minute, governor. wait a minute. >> my experience is the private sector is able to provide a better product at a lower cost. >> lehrer: can the two of you agree that the voters have a choice a clear choice between the two of you on medicare? >> absolutely. >> lehrer: all right so to finish quickly briefly on the economy. what is your view about the level of federal regulation of the economy right now? is there too much? and in your case, mr. president is there -- should there be more? beginning with you.

this is not a new two-minute segment. just start and we'll go for a few minutes and go to health care. okay? >> regulation is essential. you can't have a free market work if you don't have regulation. as a business person i had to have regulation -- i need to know the regulations, i needed them there. you could haven't people opening up banks in their garage and making loans. you have to have regulations so that you can have an economy work. every free economy has good relation. at the same time, regulation can become excessive. >> lehrer: is it excessive now, do you think? >> in some places yes. >> lehrer: like where? >> it can become out of date. and what's happened with some of the legislation that's been passed during the president's term you've seen regulation become excessive and it's hurt the economy. let me give you an example. dodd-frank was passed and it includes within it a number of provisions that i think has some unintended consequences that are harmful to the economy. one is it designates a number of banks as too big to fail and they're effectively guaranteed

by the federal government. this is the biggest kiss that's been given to new york banks i've ever seen. this is an enormous boon for them. there have been 122 community and small banks that have closed since dodd-frank. there's one example. >> lehrer: do you want to repeal dodd-frank? >> and replace it. we're not going to get rid of regulation. you have to have regulation and there's some parts of dodd-frank that make all the sense in the world. you need transparency, you need to have leverage limits for institutions. >> lehrer: here's a specific -- let's -- excuse me. >> let's talk about -- >> lehrer: no, let's not. let's let him respond. let's let him respond to this specific on dodd-frank and what the governor just said. >> well, i think this is a great example. the reason we have been in such an enormous economic crisis was prompted by reckless behavior across the board. now it wasn't just on wall street. you had loan officers that were

giving loans and mortgages that really shouldn't have been given because the folks didn't qualify. you had people who were borrowing money to buy a house that they couldn't afford. you had credit agencies that were stamping these as a-1 great investments when they weren't. but you also had banks making money hand over fist churning out products that the bankers themselves didn't even understand in order to make big profits but knowing that it made the entire system vulnerable. so what did we do? we stepped in and had the toughest reforms on wall street since the 1930s. we said you've got -- banks you've got to raise your capital requirements. you can't engage in some of this risky behavior putting main street at risk. we're going to make sure that you've got to have a living will so we can know how you're going to wind things down if you make a bad bet so we don't have other taxpayer bailouts. in the meantime, by the way, we also made sure that all the help that we provided by those banks

was paid back, every single dime, with interest. now, governor romney has said he wants to repeal dodd-frank. and, you know, i appreciate and it appears we've got some agreement that a marketplace to work has to have some regulation. but in the past, governor romney has said he just wants to repeal dodd-frank. roll it back. and so the question is does anybody out there think that the big problem we had is that there was too much oversight and regulation of wall street? because if you do than governor romney is your candidate. but that's not what i believe. >> that's just not -- that's just not the facts. look, we have to have regulation on wall street. that's why i'd have regulation. but i wouldn't designate five banks as too big to fail and give them a blank check. that's one of the unintended consequences of dodd-frank. it wasn't thought through properly. we need to get rid of that provision because it's killing

regional and small banks. they're getting hurt. let me another regulation in dodd-frank. you say we were giving mortgages to people who weren't qualified. that's exactly right. it's one of the reasons for the great financial calamity we had. so dodd-frank correctly says we need to have qualified mortgages and if you give a mortgage that's not qualified there are big penalties. except they didn't define what a qualified mortgage was. >> lehrer: all right. >> it's been two years. we don't know what a qualified mortgage is yet. so banks are reluctant to make loans, mortgages. try and get a mortgage these days. it's hurt the housing market because dodd-frank didn't anticipate putting in place the kinds of regulations you have to have. it's not the dodd-frank always was wrong with too much regulation. sometimes they didn't come out with the clear regulation. i will make sure we don't hurt the functioning of our marketplace and our businesses because i want to bring back housing and get good jobs. >> lehrer: all right. i think we have another clear difference between the two of you. now let's move to health care

where i know there is a clear difference and that has to do with the affordable care act obamacare, and it's a new segment and that means two minutes each and you go first governor romney. you wanted repeal. you want the affordable care act repealed. why. >> i sure do. well, in part it comes, again from my experience. i was in new hampshire, a woman came to me and she said "look i can't afford insurance for myself or my son." i met a couple in apple on the wisconsin, and they said "we're thinking of dropping our insurance, we can't afford it." and the number of small businesses i've gone to saying they're dropping insurance because they can't afford it. the cost of health care is just prohibitive and we've got to deal with cost. and unfortunately, when you look at obamacare the congressional budget office has said it will cost $2,500 a year more than traditional insurance. so it's adding to cost. and as a matter of fact when the president ran for office he said

that by this year he would have brought down the cost of insurance for each family by $2,500 a family. instead it's gone up by that amount. so it's expensive. expensive things hurt families. that's one reason i don't want it. second reason: it costs $716 billion from medicare to pay for it. i want to put that money back in medicare for our seniors. number three it puts in place an unelected board that's going to tell people ultimately what kind of treatments they can have. i don't like that idea. fourth, there was a survey done of small businesses across the country that said what's been the effect of obamacare on your hiring plans? and three quarters of them said "it makes us less likely to hire people." i just don't know how the president could have come into office facing 23 million people out of work, rising unemployment an economic crisis at the kitchen table and spent his energy and passion for two years fighting for obamacare instead of fighting for jobs for the american people. it has killed jobs.

and the best course for health care is to do what we did in my state-- craft a plan at the state level that fits the needs of the state and then let's focus on getting the cost down for people rather than raising it with the $2,500 additional premium. >> lehrer: mr. president the argument against repeal? >> well, four years ago when i was running for office i was traveling around and having those same conversations that governor romney talks about and it wasn't just that small businesses were seeing costs skyrocket and they couldn't get affordable coverage even if they wanted to provide it to their employees. it wasn't just that this was the biggest driver of our federal deficit, our overall health care costs. but it was families who were worried about going bankrupt if they got sick. millions of families all across the country. if they had a preexisting condition they might not be able to get coverage at all. if they did have coverage, insurance companies might impose an arbitrary limit.

and so as a consequence they're paying their premiums, somebody gets really sick, lo and behold they don't have enough money to pay the bills because the insurance companies say that they've hit the limit. so we did work on this alongside working on jobs because this is part of making sure that middle-class families are secure in this country. and let me tell you exactly what obamacare did. number one, if you've got health insurance it doesn't mean a government takeover. you keep your own insurance. you keep your own doctor. but it does say insurance companies can't jerk you aren't. they can't impose arbitrary lifetime limits. they have to let you keep your kid on your insurance plan until they're 26 years old. and it also says that you're going to have to get rebates if insurance companies are spending more on administrative costs and profits than they are on an actual care.

number two if you don't have health insurance we're essentially setting up a group plan that allows you to benefit from group rates that are typically 18% lower than if you're out there trying to get insurance on the individual market. now, the last point i'd make before -- >> lehrer: two minutes is up, sir. >> i think i've -- i had five seconds before you interrupted me. (laughter) the irony is that we've seen this model work really well in massachusetts. because governor romney did a good thing working with democrats in the state to set up what is essentially the identical model and as a consequence people are covered there. it hasn't destroyed jobs. and as a consequence we now have a system in which we have the opportunity to start bringing down costs as opposed to just leaving millions of people out in the cold.

>> lehrer: your five seconds went away a long time ago. (laughter) all right governor, tell the president directly why you think what he just said is wrong about obamacare? >> well, i did with my first statement but i'll go on. >> please elaborate. >> i'll elaborate. you're exactly right. first of all i like the way we did in the massachusetts. i like the fact that in my state we had republicans and democrats come together and work together. what you did instead was to push through a plan without a single republican vote. as a matter of fact, when massachusetts did something quite extraordinary, elected a republican senator to stop obamacare, you pushed it through anyway. so instead of bringing america together and having a discussion on this important topic you pushed throughing something that you and nancy pelosi and harry reid thought was the best answer and drove it through. what we did in a legislature 87% democrat, we worked together. only *r only two voted against the plan by the time i was

finished. what was the difference? we didn't raise taxes. you raised them by a trillion dollars under obamacare. we didn't cut medicare. of course, we didn't have medicare but we didn't cut medicare by $716 billion. we didn't put in place a board that can tell people ultimately what treatments they're going to receive. we didn't also do something that i think a number of people across this country recognize which is put people in a position where they're going to lose the insurance they had and they wanted. right now c.b.o. says up to 20 million people will lose their insurance as obamacare goes into effect next year. like wise a study by mckenzie and company of american businesses said 30% of them are anticipating dropping people from coverage. so for those reasons for the tax, for medicare, for this board and for people losing their insurance, this is why the american people don't want obamacare. it's why republicans said do not do this and the republicans had the plan, they put a plan out they put a bipartisan plan, it was swept aside. i think something this big this

important has to be done in a bipartisan basis. and we have to have a president who can reach across the aisle and fashion important legislation with the input from both parties. >> governor romney said this has to be done on a bipartisan basis. this was a bipartisan idea. in fact, it was a republican idea. and governor romney at the beginning of this debate wrote and said what we did in massachusetts could be a model for the nation. and i agree that the democratic legislators in massachusetts might have given advice to republicans in congress about how to cooperate. but the fact of the matter is we used the same advisors and they say it's the same plan. when governor romney talks about this board, for example unelected board that we've created. what this is, is a group of health care experts doctors etc., to figure out how can we reduce the cost of care in the system overall.

because there are two ways of dealing with our health care crisis. one is to simply leave a whole bunch of people uninsured and let them fend for themselves. to let businesses figure out how long they can continue to pay premiums until finally they just give up and their workers are no longer getting insured. and that's been the trend line. alternatively we can figure out how do we make the cost of care more effective? and there are ways of doing it. so at cleveland clinic, one of the best health care systems in the world they actually provide great care cheaper than average. and the reason they do is because they do some smart things. they say if a patient's coming in, let's get all the doctors together at once, do one test instead of having the patient run around with ten tests. let's make sure that we're providing preventative care so we're catching the onset of something like diabetes. let's pay providers on the basis

of performance as opposed to on the basis of how many procedures they've engaged in. now, so what this board does is basically identifies best practices and says let's use the purchasing power of medicare and medicaid to help to institutionalize all of these good things that we do. and the fact of the matter is that when obamacare is fully implemented we're going to be in a position to show that costs are going down. and over the last two years health care premiums have gone up. it's true. but they've gone up slower than any time in the last 50 years. so we're already beginning to see progress. in the meantime, folks out there with insurance you're already getting a rebate. let me make one last point. governor romney says we should replace it. i'm not just going to repeal it, we can replace it with something. but the problem is he hasn't described what we'd replace it with other than saying we're

going to leave it to the states. but the fact of the matter is that some of the prescriptions that he's offered like letting you buy insurance across state lines, there's no indication that that's going to help somebody who's got a preexisting condition be able to finally by insurance. it's estimated that by repealing obamacare you're looking at 50 million people losing health insurance at a time when it's vitally important. >> lehrer: let's let the governor explain what you would do if obamacare is repealed. how would you replace it? >> well, actually, it's a lengthy description but number one, preexisting conditions are covered under my plan. number two young people are able to stay on their family plan. that's already offered in the private marketplace. you don't have the government mandate that for that to occur. but let's come back to something the president and i agree on which is the key task we have in health care is to get the cost down so it's more affordable for families and he has a model for

doing that a board of people doing at that the government an appointed board who are going to decide what kind of treatment you want to have. >> that's not true. >> in minute the government is not effective in bringing down the cost of almost anything. as a matter of fact, free people and free enterprises trying to find ways to do things better able to be more effective in bringing down the costs than the government will ever be. your example at the cleveland clinic is my case in point along with several others i could describe. this is the private market. these are enterprises competing with each other learning how to do better and better jobs. i used to consult to hospitals and to health care providers. i was astonished at the creativity and innovation that exists in the american people. in order to bring the cost of health care down, we don't need to have a board of 15 people telling us what kind of treatments we should have. we could cut insurance plans

providers, hospitals doctors on target such that they have an incentive, as you say performance pay for doing an excellent job for keeping costs down and that's happening. intermountain health care does it superbly well. >> they do. >> cleveland clinic, others. but the right answer is not to have the federal government take over health care and start mandating to the providers across america telling a patient and a doctor what kind of treatment they can have. that's the wrong way to go. the private market and individual responsibility always work best. >> let me just point out first of all this board that we're talking about can't make decisions about what treatments are given. that's explicitly prohibited in the law. but let's go back to what governor romney indicated that under his plan he would be able to cover people with preexisting conditions. well actually, governor, that isn't what your plan does. what your plan does is to

duplicate what's already the law which says if you are out of health insurance for three months than you can end up getting continuous coverage and an insurance company can't deny you if it's been under 90 days. but that's already the law. and that doesn't help the millions of people out there with preexisting conditions there's a why reason governor romney set up the plan that he did in massachusetts. it wasn't a government takeover of health care, it was the largest expansion of private insurance. but what it does say is that insurers, you've got to take everybody. now, that also means that you've got more customers. but when governor romney says he'll replace it with something but can't detail how it will be, in fact, replaced and the reason he set up the system he did in massachusetts was because there isn't a better way of dealing with the preexisting conditions

problem, it just reminds me of, you know, he says he's going to close deductions and loopholes for his tax plan. that's how it's going to be paid for. but we don't know the details. he says that he's going to replace dodd-frank, wall street reform. but we don't know exactly what which ones. he won't tell us. he now says he's going to replace obamacare and assure that all the good things are in it are going to be in there and you don't have to worry. and at some point i think the american people have to ask themselves, is the reason that governor romney is keeping all these plans to replace secret because they're too good? is it because that somehow middle-class families are going to benefit too much from them? no, the reason is because when we reform wall street when we tackle the problem of preexisting conditions, then, you know, these are tough problems and we've got to make choices and the choices we've made have been ones that are

benefiting middle-class families across the country. >> lehrer: we're going to move to -- >> no, but the -- >> my experience as a governor is if i come in and lay down a piece of legislation and say it's my way or the highway i don't get a lot done. what i do is the same way tip o'neill and ronald reagan worked together some years ago. when ronald reagan ran for office he laid out the principles that he was going to foster. he said he was going to lower tax rates. he said he was going to broaden the base. you've said the same thing. you're going to simplify the tax code, broaden the base. those are my principles, i want to bring down the tax burden on middle income families. and i'm going to work together with congress to say okay, what are the various ways we could bring down deductions, for instance. one way, for instance, would be to have a single number. make up a number. $25,000, $50,000. anybody can have deductions up to that amount. and then that number disappears for high income people. that's one way one could do it. one could follow bowles simpson as a model and take deduction by

deduction and make differences that way. there are alternatives to accomplish the objective i have, which is to bring down rates broaden the base, simplify the code and create incentives for growth. and with regards to health care you had remarkable details with regards to my preexisting condition plan. you've obviously studied up on my plan. in fact, i do have a plan that deals with people with preexisting conditions that's part of my health care plan. and what we did in massachusetts is a model for the nation-- state by state. and i said that at that time. the federal government taking over health care for the entire nation and whisking aside the 10th amendment which gives states the rights for these kinds of things is not the course for america to have a stronger, more vibrant economy. >> lehrer: that is a terrific segue to our next segment. and is the role of government. let's see, role of government and it is -- you are first on this mr. president. and the question is this: do you

believe-- both of you but you had the first two minutes on this mr. president-- do you believe there's a fundamental difference between the two of you as to how you view the mission of the federal government? >> well, i definitely think there are differences. the first role of the federal government is to keep the american people safe. that's its most basic function. and as commander in chief that is something that i have worked on and thought about every single day that i've been in the oval office. but i also believe that government has the capacity-- the federal government-- has the capacity to help open up opportunity and create ladders of opportunity and to create frameworks where the american people can succeed. the genius of america is the free enterprise system and freedom and the fact that people can go out there and start a business, work on an idea, make their own decisions.

but as abraham lincoln under there are also some things we do better together. so in the middle of the civil war abraham lincoln said "let's help to finance the transcontinental railroad. let's start the national academy of sciences. let's start land grant colleges because we want to give these gateways of opportunity for all americans." because if all americans are getting opportunity, we're all going to be better off. that doesn't restrict people's freedom, that enhances it. and so what i've tried to do as president is to apply those same principles. now, when it comes to education what i've said is we've got to reform schools that are not working. we used something called race to the top. wasn't a top-down approach, governor. what we've said is to states we'll give you more money if you initiate reforms. and as a consequence you had 46 states around the country who have made a real difference.

but what i've also said is let's hire another 100,000 math and science teachers to make sure we maintain our technological lead and our people are skilled and able to succeed. and hard pressed states right now can't all do that. in fact, we've seen layoffs of hundreds of thousands of teachers over the last several years and governor romney doesn't think we need more teachers. i do. i think that's the kind of investment where the federal government can help. it can't do it all but it can make a difference and as a consequence will have a better trained work force and that will create jobs because companies want to locate in places where we've got a skilled work force. >> lehrer: two minutes governor, on the role of government. your view. >> first, i love great schools. in massachusetts our schools are ranked number one of all 50 states and the key to great schools, great teachers. so i reject the idea that i don't believe in great teachers or more teachers, every school district, every state should make that decision on their own.

look behind us, the constitution and the declaration of independence. the role of government is to promote and protect the principles of those documents. first, life and liberty. we have a responsibility to protect the lives and liberties of our people and that means the military is second to known. i do not believe in cutting our military. i believe in maintaining the strength of america's military. second in that line that says we are endowed by our creator with our rights, i believe we must maintain our commitment to religious tolerance and freedom in this country. that statement also says that we are endowed by our creator with the right to pursue happiness as we choose. i interpret that as, one making sure those people who are less fortunate and can't care for themselves are cared for by one another. we're a nation that believes we're all children of the same god and we care for those that have difficulties, those that are elderly and have problems and challenges, those that are disabled. we care for them. and we look for discovery and

innovation, all these things desired out of the american heart to provide the pursuit of happiness for our citizens. but we also believe in maintaining for individuals the right to pursue their dreams. and not to have the government substitute itself for the rights of free individuals. and what we're seeing right now is, in my view, a trickle-down government approach which has government thinking it can do a better job than free people pursuing their dreams. and it's not working. and the proof of that is 23 million people out of work. the proof of that is one out of six people in poverty. the proof of that is we've gone from 32 million in food stamps to 47 million on food stamps. the proof of that is that 50% of college graduates this year can't find work. we know that the path we're taking is not working. it's time for a new path. >> lehrer: let's go through specifics in terms of how each of you view it is role of government. education. does the federal government have a responsibility to improve the quality of public education in

america? >> well, the primary responsibility for education is, of course, at the state and local level. but the federal government also can play a very important role. and i agree with secretary arnie duncan and ideas he's put forward on race to the top. not all of them but some of them and i congratulate him for pursuing that. the federal government can get local and state schools to do a better job. my own view, by the way is i've added to that. i happen to believe i want kids that are getting federal dollars from i.d.e.a. or title i these are disabled kids or poor kids or lower income kids, rather, i want them to be able to go to the school of their choice. so all federal funds instead of going to the state or to the school district i'd have go, if you will, follow the child and let the parent and the child decide where to send their student. >> lehrer: how do you see the federal government's responsibility to -- as i said, responsibility to -- as i said to improve the quality of public education in this country? >> as i've indicated, it has a significant role to play.

through our race to the top program we've worked with republican and democratic governors to initiate major reforms and they're having an impact right now. >> lehrer: do you think you have a difference with your views and those of governor romney about education? >> this is where budgets matter because budgets reflect choices. so when governor romney indicates that he wants to cut taxes and potentially benefits folks like me and him and to pay for it we're having to initiate significant cuts in federal support for education that makes a difference. his running mate, congressman ryan, put forward a budget that reflects many of the principles that governor romney's talked about. and it wasn't very detailed. this seems to be a trend but what it did do is to -- if you extrapolated how much money we're talking about you'd look at cutting the education budget by up to 20%.

when it comes to community colleges. we are seeing great work done out there all over the country because we have the opportunity to train people for jobs that exist right now. and one of the things i suspect governor romney and i probably agree on is getting businesses to work with community colleges so that they're setting up their training programs. >> lehrer: do you agree governor? >> oh, sure, oh, yeah, yeah. >> i suspect it will be a small agreement. >> lehrer:>> it's going very well in my statement, yeah. >> they're partnering so that they're designing training programs and people who are going through them know that there's a job waiting for them if they complete it. that makes a big difference, but that requires some federal support. let me just say one final example. when it comes to making college affordable-- whether it's two year or four year-- one of the things i did as president was we were sending $60 billion to banks and lenders as middlemen for the student loan program. even though the loans were

guaranteed so there was no risks for banks or lenders but they were taking billions out of the system. we said why not cut out of t middleman. as a consequence what we've been able to do is provide millions more students aassistance lower or keep low interest rates on student loans and this is an example of where our priorities make a difference. governor romney -- i genuinely believe cares about education. but when he tells a student that you should borrow money from your parents to go to college that indicates the degree to which there may not be as much of a focus on the fact that folks like myself, folks like me scheele, kids probably who attend university of denver don't have that option and for us to be able to make sure they've got that opportunity and can walk through that door, that's vitally important not just to those kids. it's how we're going to grow the economy over the long term. >> lehrer: we're running out

of time. you have a chance to respond to that. >> mr. president you're entitled as the president to your own airplane and your own house but not to your own facts. i'm not going to cut education funding. i don't have any plan to cut education funding and grants that go to people going to college i'm planning on continuing to grow so i'm not planning on making changes there but you make a very good point which is the place you put your money makes a clear indication of where your heart is. you put $90 billion into green jobs. look, i'm all in favor of green energy. $90 billion. that have hired two million teachers. $90 billion. and these businesses, many of them have gone out of business. i think half of the ones that have been invested in have gone out of business. a number happen to be owned by people are contributors to your campaigns. look, the right course for america's government -- we're talking about the role of government, is not to become the economic player picking winners and losers, telling people what

kind of health treatment they can receive, taking over the health care system that has existed in this country for a long, long time and has produced the best health records in the world. the right answer for government is to say how do we make the private sector become more efficient and effective? how do we get schools to be more competitive? let's grade them. i propose we grade our schools so parents know which schools are succeeding and failing. so they can take their child to a school that's being more successful. i don't want to cut our commitment to education, i want to make it more effective and efficient. by the way i've had that experience. i don't just talk about it, i've been there. massachusetts schools are ranked number one in the nation. this is not because i didn't have commitment to education. it's because i care about education for all of our kids. >> lehrer: excuse me, one second, excuse me, sir. we barely have three minutes left. i'm not going to grade the two of you and say your answers have been too long or i've done a poor job.

>> you've done a great job. >> lehrer: oh, well. no, but the fact is the role of government and governing. we've lost a pot, in other words. so we only have three minutes left in the debate before we go to your closing statements and so i want to ask finally here, and, remember, we've got three minutes total time here. and the question is this. many of the legislative functions of the federal government right now are in a state of paralysis as a result of partisan gridlock. if elected in your case, if reelected in your case, what would you do about it? governor? >> jim, i had the great experience-- it didn't seem like it at the time-- of being elected in a state where my legislature was 87% democrat. and that meant i figured out from day one i had to get along. and i had to work across the aisle to get anything done. we drove our schools to be number one in the nation. we cut taxes 19 times. >> lehrer: what would you do as president? >> as president i will sit down

on day one -- actually, the day after i get elected i'll sit down with democratic leaders as well as republican leaders and continue as we did in my state we met every monday for a couple hours, talked about the issues and the challenges in our state in that case. we have to work on a collaborative basis. not because we're going to compromise our principle but because there's common ground and the challenges america faces right now. look, the reason i'm in this race is there are people that are really hurting together in this country and we face -- this deficit could crush future generations. what's happening in the middle east, there are developments around the world that are of real concern. and republicans and democrats both love america but we need to have leadership. leadership? washington that will actually bring people together and get the job done and could not care less if it's a republican or a democrat. i've done it before, i'll do it again. >> lehrer: mr. president? >> first of all i think governor romney is going to have a first

day. he's always going to repeal obamacare which is not going to be very popular among democrats as you're sitting down with them. (laughter) but, look, my philosophy has been i will take ideas from anybody, democrat or republican as long as they're advancing the cause of making middle-class families stronger and giving ladders of opportunity into the middle-class. that's how we cut taxes for middle-class families and small businesses. that's how we cut a trillion dollars of spending that wasn't advancing that cause. that's how we signed three trade deals into law that are helping us to double our exports and sell more american products around the world. that's how we peel "don't ask don't tell". that's how we ended the war in iraq, as i promised, and that's how we'll wind the war in afghanistan. that's how we went after al qaeda and bin laden. so we've seen progress even under republican control of the house of representatives. but ultimately part of being principled, part of being a leader is, a being able to describe exactly what it is that you intend to do not just saying

i'll sit down but you have to have a plan. number two what's important is occasionally you've got to say no to folks both in your own party and the other party. yes, have we had some fights between me and the republicans when they fought back against us reigning in the excesses of wall street? absolutely. because that was a fight that needed to be had. when we were fighting about whether or not we were going to make sure americans had more security with their health insurance, yes, that was a fight we needed to have. >> lehrer: all right. >> so part of leadership and governing is saying what it is that you are for but also being willing to say no to some things. and i've got to tell you governor romney, when it comes to his own party during the course of this campaign, has not displayed that willingness to say no to the more extreme parts of his party. >> lehrer: that brings us to closing statements. there's a coin toss, governor romney you won the toss and you elected to go last so you have a

closing two minutes mr. president. >> well, jim, i want to thank you and i want to thank governor romney because i think this was a terrific debate and i very much appreciate it. and i want to thank the university of denver. you know, four years ago we were going through a major crisis. and yet my faith and confidence in the american future is undiminished. and the reason is because of its people. because of the woman i met in north carolina who decided at 55 to go back to school because she wanted to inspire her daughter and now has a job from that new training she's gotten. because a company in minnesota who was willing to give up salaries and perks for their executives to make sure they didn't lay off workers during a recession. the auto workers that you meet in toledo or detroit take such pride in building the best cars in the world not just because of a paycheck but because it gives

them that sense of pride that they're helping to build america. and so the question now is how do we build on those strengths and everything i've tried to do and everything i'm now proposing for the next four years in terms of improving our education system or developing american energy or making sure that we're closing loopholes for companieses shipping jobs overseas and focusing on small businesses and companies creating jobs in the united states or closing our deficit in a responsible balanced way that allows us to invest in our future. all those things are designed to make sure the american people, their genius, their grit, their determination is channeled and they have an opportunity to succeed and everybody's getting a fair shot and everybody's doing their fair share and everybody's playing by the same rules. four years ago i said that i'm not a perfect man and i wouldn't be a perfect president and that's probably a promise governor romney thinks i've

kept. but i also promise i'd fight every single day on behalf of the american people and the middle-class and all those who are striving to get into the middle-class. i've kept that promise and if you'll vote for me than i promise i'll fight just as hard in a second term. >> pelley:>> lehrer: governor romney, your two minute closing. >> thank you, jim and mr. president. thank you for tuning in this evening. this is an important election and i'm concerned about america. i'm concerned about the direction america has been taking over the last four years. i -- i know this is bigger than an election about the two of us as individuals. it's bigger than our respective parties. it's an election about the course of america what kind of america do you want to have for yourself and for your children. and there really are two very different paths we began speaking about this evening and over the course of this month we'll have two more presidential debates and a vice presidential debate. we'll talk about those two paths. but they lead in very different directions and it's not just looking to our words that you have to take into evidence of where they go. you can look at their record.

there's no question in my mind that if the president were to be reelected you'll continue to see a middle-class squeeze with incomes going down and prices going up. i'll get incomes up again. you'll see chronic unemployment. we've had 43 straight months with unemployment above 8%. if i'm president i will help create 12 million new jobs in this country with rising incomes. the president's reelected obamacare will be fully installed. in my view that's going to mean a whole different way of life for people who counted on the insurance plan they had in the past. many will lose it. you'll see health premiums go up by $2, 500 per family. if i'm elected we won't have obamacare. we'll put in place the kind of principles i've put in place in my own state and allow each state to craft their own programs to get people ensured and we'll focus on getting the cost of health care down. if the president were to be reelected, you're going to see a $716 billion cut to medicare. you'll have four million people who will lose medicare advantage. you'll have hospitals and

providers that will no longer accept medicare patients. i'll restore that $716 billion to medicare. and, finally military. the president's reelected you'll see dramatic cuts to our military. the secretary of defense has said these would be even devastating. i will not cut our commitment to our military. i will keep america strong and get america's middle-class working again. thank you jim. >> lehrer: thank you governor, thank you, mr. president. the next debate will be the vice presidential event on thursday, october 11, at centre college in danville connecticut. for now, from the university of denver, i'm jim lehrer, thank you and good night. (cheers and applause)

(applause) >> pelley: president obama and mitt romney being greeted by their families on the stage. and a very well-behaved crowd that was silent for 90 minutes bursts into applause at the very end for both men. both men came to the debate very well prepared. it was a lively debate. there were no moments at which one seemed to overwhelm the other. the only casualty of the night was the format for the debate. there was supposed to be certain subjects over certain period of times but pretty quickly both governor romney and the president began running over time and taking over the course of the debate but that made for a very lively evening. john dickerson is our cbs news political director. john what's your take away from

the debate so far? >> well, scott it's interesting looking at the pictures right now of the two candidates. they're talking to each other like they're friends. it's -- that was the sense of this debate. there was no -- it was a lot of clear choices but i think if you look at the context of this debate, governor romney was coming in, there was some trouble. conservatives were worried about him. they were worried he was losing this race. i think that he was competent and calm and looked the president's equal in this debate and i think for him giving the state of where the romney campaign was that was probably a good thing for him tonight. >> pelley: and both candidates were not shy about attacking the other. >> that's right. but they were not overly aggressive. the challenge for romney was could he both be aggressive with the president but also look appealing to the voters. and it appears he was able to do that tonight. pressing his case but also respectful enough so that at the end they could be smiling and introducing each other to their

families. >> pelley: and so ends the first debate of the 2012 campaign. there will be three more debates, a vice presidential debate next week and then two more debates with mr. romney and the president, there was a moment, john during the debate, where the two candidates were attacking each other's tax policy and i think it's a good window on how the candidates felt free to go after each other. let's have a look at that for just a moment. >> if you believe we can cut taxes by $5 trillion and add $2 trillion in additional spending that the military is not asking for. $7 trillion, to give you a sense over ten years that's more than our entire defense budget. and you think that by closing loopholes and deductions for the well-to-do somehow you will not end up picking up the tab than governor romney's plan may work for you. >> i want to lower spending and

encourage economic growth at the same time. what things would i cut from spending? well, first of all i will eliminate all programs by this test, if they don't pass it. is the program so critical it's worth borrowing money from china to pay for it? if not i'll get rid of it. obamacare is on my list, i apologize mr. president, i use that term with all respect. >> i like it. >> okay, good. >> pelley: and tonight the president endorsed the term obamacare which republicans have used as a pejorativive the all this time but the president embraced it tonight. what did you make of those kinds of scenes, john, where the two candidates were really going straight at each other? >> coming out of this debate there's going to be a big long discussion about specifics. what the president was saying is governor romney is making all of these claims, he's going to do all kinds of things and what he's not telling you is the specifics. and that's what he was trying to say there is that it just doesn't add up. in the context of this debate, though, governor romney was saying, no i've got very specific things i'm going to do.

so what this debate kicks off is a big argument that will rumble out into the hallways and across this country about whether what obama is saying, the details of the romney plan are are they what obama says or are the details the ones that romney says. and romney was a little vague on those details. >> pelley: and that has been a rap on the romney campaign for a long time that he won't identify, for example, the kinds of tax deductions that he says he's going to limit. earlier in the debate the president asked whether romney essentially had a secret plan to benefit america. let's listen to that. >> there's a reason why governor romney set up the plan that he did in massachusetts. it wasn't a government take-or-of health care, it was the largest expansion of private insurance. but what it does say is that insurers you've got to take everybody. now, that also means you've got more customers. but when governor romney says he'll replace it with something but can't detail how it will be,

in fact, replaced and the reason he set up the system he did in massachusetts is because there isn't a better way of dealing with the preexisting conditions problem. >> pelley: our chief white house correspondent nancy cordes has been here in denver watching the debate. nancy, what did you make of the president's performance and dehid accomplish what he set out to do? >> well, scott as you saw in that clip, the president went on offense early and often and this debate could have turned into a referendum on everything he's done over the past four years. to a surprising degree, it did not. he kept the pressure on governor romney on two of his policies that have caused romney the most trouble in this campaign, his tax plan and his medicare plan. romney has struggled to explain what he would do and the president kept going back to those proposals over and over again. on the down side for the president, you could clearly see the influence of those 23 republican primary debates that romney participated in.

he was very energetic probably more energetic than the president and most tellingly scott, i haven't gotten a single e-mail from the obama campaign yet contending that the president was the winner tonight. >> pelley: nancy you mentioned all of that practice that mr. romney had. we totaled it up earlier today our research department. and the republican candidates during their primaries had more than 50 hours of televised debates so that is a lot of practice. now one of the things that the romney campaign has been smarting about is polling all across the country that seems to indicate that most people believe that it is the president who understands their problems. it was an interesting way that mr. romney started the debate tonight when he made his opening statement, reaching out to voters individually and directly. let's have a look. >> ann yesterday was at a rally in denver and a woman came up to her with a baby in her arms and

said "ann, my husband has had four jobs in three years, part time jobs. he's lost his most recent job and we've now just lost our home. can you help us?" and the answer is yes, we can help. >> pelley: jan crawford has been covering the romney campaign for us and jan the governor has been trying to battle back against this image of him being a wealthy man who does not understand the needs of the middle-class. i wonder, did he accomplish that tonight? how big a goal was that for the romney campaign? >> . >> scott repeatedly romney's advisors said he needed to talk to directly to the american people and say "i get it, here is what i am proposing to make your lives better." i just spoke with senator rob portman, he played the president in all of romney's debate, mock debate performances, preparing for this debate and he said he believed tonight's debate changed the dynamics of this race and the romney that we saw

on that stage is the romney we're going to see for the next five weeks. he's going to take this message this effort to connect the specifics he used, the discussion about his record in massachusetts and his proposals on that campaign trail. he said you're going to see that in weeks weeks to come. romney talking about the specifics of his propose as and connecting with the american people. >> pelley: jan, thank you. cbs news coverage of the first presidential debate of 2012 will continue from denver in just a moment.

vo: for years, sacramento politicians have chopped away funds for our schools. today, we're forty-seventh out of fifty in per-pupil funding. now these politicians say unless we send more tax dollars to sacramento, they'll cut education again. here's a new approach. prop thirty-eight sends billions in new education dollars straight to our local schools, and guarantees the politicians can't touch it. thirty-eight will restore the education cuts from sacramento. so remember this number. thirty-eight. university of denver with our coverage of the debate. by design, tonight's debate was all about the economy and jobs and, of course, both candidates had very different views on the path for america's future. let's have a look at just a

moment when both of the candidates were talking about tax policy and creating jobs. >> there is where there's a difference because governor romney's central economic plan calls for a $5 trillion tax cut on top of the extension of the bush tax cuts, that's another trillion dollars and $2 trillion in additional military spending that the military hasn't asked for. that's $8 trillion. how we pay for that, reduce the deficit and make the investments that we need to make without dumping those costs on the to middle class americans is one of the central questions of this campaign. >> first of all, i don't have a $5 trillion tax cut. i don't have a tax cut of the scale that you're talking about. my view is that we ought to provide tax relief to people in the middle class. but i'm not going to reduce the share of taxes paid by high-income people. high-income people are doing just fine in this economy. they'll do fine whether you're president or i am. the people having a hard time right now are middle income americans. under the president's policies, middle income americans have been buried.

they're being crushed. middle income americans have seen their income come down by $4,300. this is a tax in and of itself. i'll call it the economy tax. it's been crushing. >> pelley: juliana goldman is white house correspondent for bloomberg news and she's helping us with our analysis tonight. juliana, we heard a lot about taxes and tax policy tonight. how much did you hear about creating jobs for america? >> scott ultimately the obama campaign wants everything to feed into the narrative that mitt romney is not going to fight for the middle-class that he's not in their corn sore even though the first question in this debate was about jobs you saw the president quickly pivot to a discussion about tax policy because that's where they think they're on the strongest ground with mitt romney. but in terms of what you heard from each candidate on jobs tonight, neither of them really laid out specific plans for -- to boost hiring, both of them

stayed at 30,000 feet. the president highlighted the positive news that we've seen in jobs. he mentioned five million jobs created over the last 30 months but he quickly pivoted to turn to mitt romney saying he would take the country back to the same policies under george w. bush that led to the worst economic crisis since the great depression. romney, he laid out his five-point plan but really the only specific we heard there was that would create four million jobs through energy independence. so for the romney campaign they want you to think 8.1% unemployment and think barack obama and the obama campaign wants you to think 47%. they want you to think of romney's effective tax rate at 14%. but the president didn't go there tonight. he missed those opportunities and left an opening for the romney campaign. >> pelley: >> pelley: juliana, thank you very much. joining us right now is major garrett from "national journal."

one of the subjects covered tonight was health care, the affordable care act which some people call obamacare a term the president endorsed tonight. he said he liked that term. i wonder what you thought of the cases that were made by governor romney and the president on health care. >> scott great to be with you. i thought the health care debate was a prism into which to look at the entire economic debate which this debate was focused on largely. but health care talked about jobs, mitt romney said the president's health care law will cost jobs. the president said no it will provide jobs and security. so you saw strong contrast between the perceptions of what the president's health care law means. governor romney went to great lengths to say he would preserve existing medicare, create a choice system for future retirees, those ten years away from it, and he also said those in tupper income in america would pay or receive less medicare benefits on a means-tested basis. that's a new idea he hasn't pushed as aggressively. what i think the president failed to do is something his campaign has been attacking mitt romney on which is the whole question about access to contraceptions and payment for that under a health care law for

women. that's a key constituency for the president. his campaign has talked a bit about it but in his health care answers the president defended his health care law but didn't attack governor romney on what is clearly in the polling data been one of his biggest vulnerabilities. my guess is, scott, that have debate some democrats will ask themselves and the president why he missed that opportunity. >> pelley: major, thank you very much. we'll be back in a moment were w more inciteful analysis and an instant poll among independent voters who hadn't made up their minds on which candidate but have new insights on that idea after the debate. we'll be back in a minute.

music is a universal language. but when i was in an accident... i was worried the health care system spoke a language all its own with unitedhealthcare, i got help that fit my life. information on my phone. connection to doctors who get where i'm from. and tools to estimate what my care may cost. so i never missed a beat. we're more than 78,000 people looking out for more than 70 million americans. that's health in numbers. unitedhealthcare. she's "time's" assistant managing editor. rana, i wonder what you thought about the two candidates as they talked about the economy. how did their plans measure up against each other? >> i think the key issue is

taxes and i think you have to wonder whether romney's math adds up. i think we're still left really wondering about a lot of details, about how this plan is going to garner the revenue he's talking about. i think we still don't know what sort of loopholes are going to be closed. and whether or not the math can be made to work without opening up contentious loopholes like the mortgage interest deduction. but i think there's a biggest math issue here and that's whether or not lowering tax rates creates jobs and growth. i would argue that factually it doesn't. it hasn't over the last three years and it hasn't -- it didn't in 2000 when the bush era tax cuts were deeper and broader. i think that's really the problem here. >> pelley: rana, to your point, earlier in the debate, the president was talking about the lack of specifics in romney's economic plans and he had this this to say about

whether romney's plan was a secret plan. >> he says that he's going to replace dodd-frank, wall street reform, but we don't know exactly which ones. he won't tell us. he now says he's going to replace obamacare and assure all the good things that are in it are going to be in there and you don't have to worry. and at some point i think the american people have to ask themselves is the reason that governor romney is keeping all these plans to replace secret because they're too good? >> pelley: rana, there were about 24 million americans who lost their jobs after the great recession, 12 million still without work. i wonder: do you think they heard anything tonight from either candidate that would give them hope that there would be more jobs in the next quarter? >> i don't think they heard a definitive answer. i think what they heard from governor romney was that tax cuts are going to create growth. i think what the president tried to convince voters is that

invest system going to create growth. investment into education into research and science and i think there's a case to be made for that. if you look at where jobs are going, to places like china infrastructure is spending much higher, there's more investment in those basic competitiveness issues. unfortunately, i don't think the president made that point sharply enough and i think he's going to need to hone that in the next few weeks. >> pelley: rana, thank you very much. president obama and governor romney are aiming their campaigns at a shrinking target, those voters who have not yet made up their minds. or who say they could still change their minds. so as they go, so goes the election. cbs news with the help of g. f.k.'s knowledge panel recruited about 500 of these uncommitted voters to watch the debate tonight and give us their reaction. anthony mason is in new york and he tells us now what we found out, anthony? >> reporter: scott among those uncommitted voters we polled after the debates tonight the results were quite

convincing for governor romney. we asked them which candidate do you think did the best job or won tonight's debate. 22% said the president 46% said governor romney. so about a 2-1 win there. that moved the need until another way for governor romney tonight. we asked after tonight's debate has your opinion of governor romney changed for the better? 56% said it had. only 11% said it had changed for the worse. finally, governor romney has been criticized for not possibly relating to middle-class or ordinary americans. we asked voters whether each candidate cares about their needs and problems. before the debate 30% only 30% said governor romney did. 53% said president obama did. but look at after the debate. romney's numbers almost doubled to 63%. president obama's did move up slightly. he still lead there but romney gained a lot of ground here, scott. >> pelley: anthony, thank you very much. of course as we said this is a little over 400 people who had

not made up their minds on which candidate they would support. but john dickerson what do you make of those numbers. >> those are the people mitt romney needs to talk to. these are the people who are -- they may have voted for president obama in 2008, they like him but they just are disappointed and the transaction mitt romney needed to start tonight was saying to those people it's okay to leave him and i'm a safe place to go. that jump in the number of people who thought he cared about regular people, that -- if they could have written a perfect script that's the one the romney people would have written. somebody wrote in to me today and said just after the debate said the governor of massachusetts showed up. which was a way to talk about the fact that mitt romney showed up as a more moderate character. hasn't talked a lot about his record in massachusetts on the stump. he talked about it here which gives that more appealing view to voters out there. now the question will be how fast and how long did do these things live outside the debate hall. how fast will the obama team try to stuff this good performance back in the box for mitt romney and how will mitt romney play on

that? because we've seen debates have momentary benefits in a race and then it disappears. >> pelley: two more presidential debates in october. what do the candidates need to do now that they've done this ground work? >> obama needs to press the case against mitt romney. he needs to stop the gains that mitt romney made tonight. >> pelley: thank you very much john. so the first presidential debate is history. here is what is coming up. next week the vice presidential candidates will debate. the following week obama romney round two. with a town hall meeting kind of format. and then the third and final debate focusing on foreign policy two weeks before election day. campaign 2012 coverage continues 24/7 at cbsnews.com. there will be more about tonight's debate first thing tomorrow on "this morning" with charlie rose, norah o'donnell and gayle king. as for who won the debate tonight, that's entirely up to you. i'm scott pelley in denver. good night.

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